The situation that this lawsuit is trying to save you from is this: (1) copilot blurps out some code X that you use, and then redistribute in some form (monetized or not); (2) it turns out company C owns copyright on something Y that copilot was trained on, and then (3) C makes a strong case that X is part of Y, and that your use of X does not fall under "fair use", i.e. you infringed on the licensing terms that C set for Y.

You are now in legal trouble, and copilot put you there, because it never warned that you X is part of Y, and that Y comes with such and such licensing terms.

Whether we like copilot or not, we should be grateful that this case is seeking to clarify some things are currently legally untested. Microsoft's assertions may muddy the waters, but that doesn't make law.